Soleno Therapeutics Provides Corporate Update and Reports Fourth Quarter and Full-Year 2017 Financial Results
“The past 12 months have been transformative for our company,” said
“In addition, we have strengthened our intellectual property around DCCR, and our lead product candidate received designation as an orphan medicinal product for the treatment of PWS in the
Full-Year 2017 Corporate Highlights
- Completed successful interactions with key regulatory agencies concerning DCCR for PWS
- Confirmed that the
FDA and Soleno are aligned on key aspects of Soleno’s planned Phase III clinical trial for DCCR - Received scientific advice from the Committee for Medicinal Products for Human Use of the European Medicines Agency (“EMA”)
- EMA indicated that a single pivotal trial would support a Marketing Authorisation Application, and indicated their general acceptance of several key aspects of the proposed development plan
- Confirmed that the
- Significantly enhanced balance sheet
- Completed
$10 million financing in conjunction with closing of Essentialis merger - Raised additional aggregate gross proceeds of approximately
$15 million through a private placement of Soleno’s common stock- Led by
Oracle Investment Management ,Jack W. Schuler andBirchview Capital , and supported by certain of Soleno’s existing investors
- Led by
- Completed
- EMA’s Committee for Orphan Medicinal Products issued a positive opinion recommending DCCR for designation as an orphan medicinal product for the treatment of PWS
- Presented updated positive safety and efficacy data from the pilot clinical trial of DCCR in PWS at the 10th International Meeting of Pediatric Endocrinology
- Two new U.S. patents issued for DCCR in PWS
- Patent number 9,757,384 is related to the use of pharmaceutical formulations of diazoxide and its salts, such as diazoxide choline, to reduce one or more aggressive behaviors in a subject with PWS or Smith-Magenis syndrome
- Patent number 9,782,416 is related to the use of pharmaceutical formulations of diazoxide to treat hyperphagia in a subject with PWS
- Regained compliance with NASDAQ listing requirements
- Monetized multiple non-core assets
- Entered into a joint venture agreement with
OptAsia Healthcare Limited (“OAHL”) for the development and commercialization of Sensalyze technology. OAHL may invest up to$2.2 million in tranches to purchase shares of Soleno’s, subsidiary,Capnia, Inc. (“Capnia”). OAHL is responsible for funding operations ofCapnia and has the option to buy up to all of the shares ofCapnia at a prespecified future time, and at a value based on revenue. Sold NeoForce, Inc. (“NeoForce”), which manufactures and promotes a range of innovative pulmonary resuscitation solutions in the neonatal market, to Flexicare, Inc., a privately-held, leading UK–based manufacturer of airway management, anesthesia and critical care medical devices
- Entered into a joint venture agreement with
Fourth Quarter Ended
As a result of the decision to sell NeoForce and to partner the CoSense and Serenz businesses, all revenue and expenses of these businesses have been excluded from continuing operations for all periods herein and reported as discontinued operations. All assets and liabilities of these businesses have been classified as assets and liabilities held for sale on the balance sheet. All prior period information has been recast to conform to this presentation.
Research and development expenses in the fourth quarter of 2017 were
General and Administrative expenses in the fourth quarter of 2017 were
The change in the fair value of contingent consideration results from Soleno’s obligation to make cash payments to Essentialis stockholders upon the achievement of certain future commercial milestones associated with the sale of Essentialis’ product in accordance with the terms of the Essentialis merger agreement. The fair value of the liability for the contingent consideration payable by Soleno was initially established as approximately
The loss from continuing operations for the fourth quarter of 2017 was
The loss from discontinued operations for the fourth quarter of 2017 was
The net loss for the fourth quarter of 2017 was
At
Year Ended
As a result of the decision to sell NeoForce and to partner the CoSense and Serenz businesses, all revenue and expenses of these businesses have been excluded from continuing operations for all periods herein and reported as discontinued operations. All assets and liabilities of these businesses have been classified as assets and liabilities held for sale on the balance sheet. All prior period information has been recast to conform to this presentation.
Research and development expenses in the year ended
General and Administrative expenses in the year ended
The change in the fair value of contingent consideration results from Soleno’s obligation to make cash payments to Essentialis stockholders upon the achievement of certain future commercial milestones associated with the sale of Essentialis’ product in accordance with the terms of the Essentialis merger agreement. The fair value of the liability for the contingent consideration payable by Soleno was initially established as approximately
The change in fair value of warrants expense for the 12-months ended
The loss from continuing operations for the year ended
The loss from discontinued operations for the year ended
The net loss for the year ended
Cash and cash equivalents at
About PWS
About Diazoxide Choline Controlled-Release Tablet
Diazoxide choline controlled-release tablet is a novel, proprietary extended-release, crystalline salt formulation of diazoxide, which is administered once-daily. The parent molecule, diazoxide, as an oral suspension, has been used for decades in thousands of patients in a few rare diseases in neonates, infants, children and/or adults, but not in PWS. Soleno conceived of and established extensive patent protection on the therapeutic use of diazoxide and DCCR in patients with PWS. The DCCR development program is supported by positive data from five completed Phase I clinical studies in various metabolic indications or in healthy volunteers and three completed Phase II clinical studies, one of which was in PWS patients. In the PWS Phase II study, DCCR showed promise in addressing hyperphagia, the hallmark symptoms of PWS.
About
Soleno is focused on the development and commercialization of novel therapeutics for the treatment of rare diseases. The company is currently advancing its lead candidate, DCCR, a once-daily oral tablet for the treatment of PWS, into a Phase III clinical development program in early 2018.
For more information, please visit www.soleno.life.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to many risks and uncertainties. Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our ability to initiate the Phase III clinical development program of DCCR in PWS in early 2018.
We may use terms such as "believes," "estimates," "anticipates," "expects," "plans," "intends," "may," "could," "might," "will," "should," "approximately" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained herein, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this presentation. As a result of these factors, we cannot assure you that the forward-looking statements in this press release will prove to be accurate. Additional factors that could materially affect actual results can be found in Soleno’s Form 10-Q filed with the
CONTACT:
LifeSci Advisors, LLC
212-915-2578
| Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.) Consolidated Balance Sheets |
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| December 31, 2017 |
December 31, 2016 |
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| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $17,099,507 | $ 2,725,996 | ||||
| Restricted cash | 35,000 | 35,000 | ||||
| Prepaid expenses and other current assets | 342,927 | 246,570 | ||||
| Current assets held for sale | 516,373 | 793,728 | ||||
| Total current assets | 17,993,807 | 3,801,294 | ||||
| Long-term assets | ||||||
| Property and equipment, net | 22,885 | 42,021 | ||||
| Other assets | 125,530 | 125,530 | ||||
| Intangible assets, net | 20,413,056 | — | ||||
| Long-term assets held for sale | 466,387 | 1,596,007 | ||||
| Total assets | $39,021,665 | $ 5,564,852 | ||||
| Liabilities and stockholders’ equity | ||||||
| Current liabilities | ||||||
| Accounts payable | $ 633,104 | $ 410,512 | ||||
| Accrued compensation and other current liabilities | 973,054 | 1,050,466 | ||||
| Current liabilities held for sale | 126,611 | 246,400 | ||||
| Total current liabilities | 1,732,769 | 1,707,378 | ||||
| Long-term liabilities | ||||||
| Series A warrant liability | 351,713 | 194,048 | ||||
| Series C warrant liability | 5,880 | 85,490 | ||||
| 2017 PIPE Warrant liability | 5,076,000 | — | ||||
| Contingent liability for Essentialis purchase price | 5,081,840 | — | ||||
| Other liabilities | 13,163 | 61,739 | ||||
| Long-term liabilities held for sale | 225,392 | 81,000 | ||||
| Total liabilities | 12,486,757 | 2,129,655 | ||||
| Commitments and contingencies (Note 7) | ||||||
| Stockholders’ equity | ||||||
| Preferred Stock, $.001 par value, 10,000,000 shares authorized: | ||||||
| Series B convertible preferred stock, 13,780 shares designated at December 31, 2017, and December 31, 2016; 4,571 and 12,780 shares issued and outstanding at December 31, 2017, and at December 31, 2016, respectively. Liquidation value of zero. | 5 | 13 | ||||
| Common stock, $0.001 par value, 100,000,000 shares authorized, 19,238,972 and 3,357,387 shares issued and outstanding at December 31, 2017, and December 31, 2016, respectively. | 19,239 | 3,357 | ||||
| Additional paid-in-capital | 140,494,976 | 101,743,714 | ||||
| Accumulated deficit | (113,979,312 | ) | (98,311,887 | ) | ||
| Total stockholders’ equity | 26,534,908 | 3,435,197 | ||||
| Total liabilities and stockholders’ equity | $ 39,021,665 | $ 5,564,852 | ||||
| Soleno Therapeutics, Inc. |
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| (formerly known as Capnia, Inc.) |
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| Consolidated Statement of Operations |
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| For the Quarters Ended | |||||||||||||
| December 31, | |||||||||||||
| 2017 | 2016 | ||||||||||||
| Operating Expenses | |||||||||||||
| Research and development | $ | 1,022,781 | $ | 288,370 | |||||||||
| General and administrative | 1,684,358 | 1,544,664 | |||||||||||
| Change in fair value of contingent consideration | 2,492,192 | - | |||||||||||
| Total operating expenses | 5,199,331 | 1,833,034 | |||||||||||
| Operating loss | (5,199,331 | ) | (1,833,034 | ) | |||||||||
| Interest and other income (expense) | |||||||||||||
| Cease-use income (expense) | 1,606 | - | |||||||||||
| Change in fair value of warrants liabilities income (expense) | (938,211 | ) | 371,809 | ||||||||||
| Other income (expense) | 4,456 | 39,918 | |||||||||||
| Total other income (expense) | (932,149 | ) | 411,727 | ||||||||||
| Loss from continuing operations before provision for income tax benefit | (6,131,480 | ) | (1,421,307 | ) | |||||||||
| Provision for income tax benefit from continuing operations | 1,650,467 | - | |||||||||||
| Loss from continuing operations | (4,481,013 | ) | (1,421,307 | ) | |||||||||
| Loss from discontinued operations: | |||||||||||||
| Operating loss | (566,454 | ) | (1,191,790 | ) | |||||||||
| Loss on sale of assets, net of tax effect | 21,700 | - | |||||||||||
| Loss from discontinued operations | (544,754 | ) | (1,191,790 | ) | |||||||||
| Net loss | (5,025,767 | ) | (2,613,097 | ) | |||||||||
| Loss per common share from continuing operations, basic and diluted | $ | (0.39 | ) | $ | (0.45 | ) | |||||||
| Loss per common share from discontinued operations, basic and diluted | (0.05 | ) | (0.37 | ) | |||||||||
| Net loss per common share, basic and diluted | $ | (0.43 | ) | $ | (0.82 | ) | |||||||
| Weighted-average common shares outstanding used to calculate basic | |||||||||||||
| and diluted net loss per common share | 11,555,294 | 3,187,173 | |||||||||||
| Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.) Consolidated Statements of Operations |
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| For the Years Ended December 31, |
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| 2017 | 2016 | |||||
| Operating Expenses | ||||||
| Research and development | $ | 3,068,742 | $ | 2,247,141 | ||
| Sales and marketing | 25,731 | — | ||||
| General and administrative | 6,584,650 | 6,076,976 | ||||
| Change in fair value of contingent consideration | 2,492,192 | — | ||||
| Total operating expenses | 12,171,315 | 8,324,117 | ||||
| Operating loss | (12,171,315 | ) | (8,324,117 | ) | ||
| Interest and other income (expense) | ||||||
| Cease-use income (expense) | 4,167 | (93,749 | ) | |||
| Change in fair value of warrants liabilities | (967,055 | ) | 1,667,117 | |||
| Other income (expense) | (590,114 | ) | 13,129 | |||
| Total other income (expense) | (1,553,002 | ) | 1,586,497 | |||
| Loss from continuing operations before provision for income tax benefit | (13,724,317 | ) | (6,737,620 | ) | ||
| Provision for income tax benefit from continuing operations | 1,650,467 | — | ||||
| Loss from continuing operations | (12,073,850 | ) | (6,737,620 | ) | ||
| Loss from discontinued operations: | ||||||
| Operating loss | (3,407,596 | ) | (5,327,594 | ) | ||
| Loss on sale of assets, net of tax effect | (185,979 | ) | — | |||
| Loss from discontinued operations | (3,593,575 | ) | (5,327,594 | ) | ||
| Net loss | (15,667,425 | ) | (12,065,214 | ) | ||
| Loss on extinguishment of convertible preferred stock | — | 3,651,172 | ||||
| Net loss applicable to common stockholders | (15,667,425 | ) | $ | (15,716,386 | ) | |
| Loss per common share from continuing operations, basic and diluted | $ | (1.35 | ) | $ | (2.17 | ) |
| Loss per common share from discontinued operations, basic and dilute | (0.40 | ) | (1.72 | ) | ||
| Loss per common share from extinguishment of convertible preferred stock | — | (1.18 | ) | |||
| Net loss per common share, basic and diluted | $ | (1.75 | ) | $ | (5.07 | ) |
| Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 8,977,795 | 3,101,496 | ||||
Source: Soleno Therapeutics